Lower taxation lifts KLK’s Q2 bottom line

PETALING JAYA: Kuala Lumpur Kepong Bhd’s (KLK) net profit for the second quarter (Q2) ended March 31, 2019 jumped 34.7% to RM142.96 million from RM106.15 million a year ago, thanks to lower taxation and surplus of RM25.6 million arising from the government’s acquisition of plantation land.

However, its revenue fell 15.9% to RM3.94 billion compared with RM4.69 billion in the previous year’s corresponding quarter as plantation profit was substantially lower by 55.8%.

The group has proposed to declare an interim dividend of 15 sen per share for the quarter under review.

For the six-month period, KLK’s net profit grew 15.3% to RM393.87 million from RM341.51 million a year ago, mainly thanks to surplus from government’s acquisition of plantation land of RM48.1 million and foreign currency exchange gain of RM35 million from translation of inter-company loans denominated in foreign currencies.

Its revenue declined 18.6% to RM8.03 billion from RM9.86 billion.

KLK told Bursa Malaysia that in Q2, its CPO and palm kernel prices slipped 17.9% and 37.3% year-on-year to RM1,969 and RM1,301 per tonne due to high stocks level.

For oleochemical business, the profits for the first half was lower as compared to the same period last year. Going forward, margins are volatile but reasonable profit is expected in view of capacity utilisation.

“Overall, the group’s operational profits are expected to be lower for financial year 2019,“ KLK said.